Principles of stock selection for medium and long term stocks

(1) Choose only the most profitable industries.

(2) Only do the industry leader.

What are the most profitable industries in China today? Financial industry, real estate industry, rare resource industry (mine), consumer industry (liquor).

(3) Medium and long term stock selection must be in the hot industry of the market at that time. For example, the financial and real estate industries in 2007-2008, with the expectation of RMB appreciation, should be the first choice.

(4) Long term stock selection in the first fundamental, the second technical. Only when the fundamentals are good, such as the industry has development prospects, the company's performance is stable growth, and the P / E ratio is not high, can it be qualified to be selected as long-term stocks; on this basis, we can look at the technical side, which requires that the price is not high, the main force is collecting for a long time, and the callback is in place.

In line with the above conditions, can be selected to do long-term stocks. The operation principle is to buy in batches after adjustment, and the more you fall, the more you buy. The holding time is relatively long. The term of the middle line principle should be a band market cycle. Generally speaking, the time cycle of a medium and long-term stock should be more than one month. During this period, buying may be affected by some short-term factors, such as the market plummeting, part of the funds temporarily fled, resulting in intraday decline. When this happens, on the one hand, don't panic. On the other hand, since it is the selected medium and long-term stock, it should increase its position in the sharp drop.